State Farm, pleads with department of insurance for Calif rate hike

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John@Outfront

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State Farm sent a 4 page letter to the department of insurance asking for permission to raise home rates by 22% (from what i can tell is this is across the board, this is just not in the Palisades or Eaton fires "to avoid financial ruin"

pass the mismanaged forest, hills and water tanks on the consumer, newscum wont feel a thing............

iam ready to pay off my house and self insure, pool, bomb shelter, etc
 
John@Outfront said:
State Farm sent a 4 page letter to the department of insurance asking for permission to raise home rates by 22% (from what i can tell is this is across the board, this is just not in the Palisades or Eaton fires "to avoid financial ruin"

pass the mismanaged forest, hills and water tanks on the consumer, newscum wont feel a thing............

iam ready to pay off my house and self insure, pool, bomb shelter, etc
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These rate increases are not sustainable for anyone.

I am on the Board of Directors for an HOA, 40% increase last year alone, and probably another 20% this year. These costs have to go to the homeowners, all while their home insurance is jumping at the same time. Crazy increases.
 
John@Outfront said:
State Farm sent a 4 page letter to the department of insurance asking for permission to raise home rates by 22% (from what i can tell is this is across the board, this is just not in the Palisades or Eaton fires "to avoid financial ruin"

pass the mismanaged forest, hills and water tanks on the consumer, newscum wont feel a thing............

iam ready to pay off my house and self insure, pool, bomb shelter, etc
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I have a close friend who is a state farm agent and have spoken with him a few times in the last few years about this. This is going to be a huge factory reset.
The insurance company's have been begging Californias insurance commissioner to come to the table with a restructure for the rates here. From what I have been told, allot of insurance company's have been running at a loss for years in California. Thats why so many company's have pulled out of the market in the last few years. If you compare our rates to other markets with similar losses, we were way cheaper than allot of other states. Don't get me wrong, I hate the insurance company's and there profits, but they are just that, company's, and have to answer to the shareholders as well. I find them to be a necessary evil!!
I hate paying for them, until I need them!
 
Yep, that's why a LOT left the CA market. Without Rate hikes, it just isn't profitable...costs are thru the roof. Auto claims are the same way... now for some reason, when a car is at a shop and is a total loss, the same shops that pre covid got $60 per day to "store" the car now want $300 per day..... explain that to someone with common sense.... greed is alive and well in CA. Materials, labor, everyone jumped on the "it's covid" bandwagon and jacked up their prices because they could...now we are seeing the results.
 
You win some, you lose some. They been screwing people for years and now it's time to pay some of it back. Everybody pays (in most cases more than they should be paying so insurance companies can turn a profit) what the insurance companies say to get adequate insurance. Maybe they should be buying their own insurance for when they lose their ass. A taste of their own medicine.
 
Fireballsocal said:
Hopefully it will be more affordable than the Ca. fair plan.
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The Fair plan will likely be bankrupt in the next week or so...........The insurance companies in CA will have to kick in money to pay out those claims.... This all started when the state decided it was cool to hate insurance companies. Now look at the mess they've made....
 
Rorschach said:
You win some, you lose some. They been screwing people for years and now it's time to pay some of it back. Everybody pays (in most cases more than they should be paying so insurance companies can turn a profit) what the insurance companies say to get adequate insurance. Maybe they should be buying their own insurance for when they lose their ass. A taste of their own medicine.
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They do, it’s called reinsurance.
California has had a long term goal of “pooling” retirement, medical & insurance programs under a state run umbrella requiring citizens to sign up / pay into state sponsored benefit plans. This would allow for thousands more state employees and access to billions more dollars in various state owned accounts.
 
I have friends who had State Farm and were canceled due to fire risk. This would take an average rural house's plan from $1500-ish a year to $1,800. Maybe a $2500 plan to $3000.

22% is a lot, but...

Most of those who have been canceled have had to switch the CA FAIR plan, which is $8-9k combined for fire and regular homeowners insurance.

I'll take the 22%. Thank you.
 
So out of touch, our gov't is:

calmatters.org

State Farm asks for more insurance rate increases after LA fires

State Farm, which already has rate increase requests pending, asked state officials to approve more insurance price increases.
calmatters.org calmatters.org

"The company has nearly 3 million policies in the state, including 1 million homeowner policies, the executives said. They mentioned that last year, credit-rating firm AM Best downgraded the credit rating for State Farm General, the California arm of the nationwide State Farm Group, because of its financial picture."

In response:

“Insurance Commissioner Lara must require State Farm to prove it needs this staggering increase,” Balber said.

I'm pretty sure the credit rating reduction makes it pretty clear... Sadly, the best-case scenario is they approve the rate hike, which will exonerate the state from it's woeful management of forest lands. Again, a reminder of CA "forest management" from it's natural state to now:

1738861255997.png
 
State Farm has operated at a substantial net income loss totaling over 14 billion dollars from 2021 to 2023. That being said, total assets for 2023 were over 220 billion dollars. In 2020 total assets were over 190 billion. State Farm has more than enough reserves (and growing) to weather the storm. At some point, when mother nature finishes managing her overgrown brush, the fire danger in California will reduce significantly. Will there still be fires? The answer would be yes but I would believe that the acreage burned would be substantially less due to the reduction in available fuel. 50 years from now the same fire issue will resurface as we continue to mismanage our forests and relax our building codes even more to allow more building of homes in areas prone to fires. In 1961 there was a major fire ( for that time period) in the Palisades area that destroyed 450 homes. Seems we didn’t learn anything from that event nor will we learn from the current fires as history is doomed to repeat itself. Will insurance companies reduce their rates once several years have passed without major losses due to fire? We all know the answer to that question. So the insurance companies lose billions in net income for a few years but remain solvent due to their massive reserves and then recover ten fold with record profits for multiple years because they will not reduce their premiums in response to less risk.
 
Sandkist said:
. So the insurance companies lose billions in net income for a few years but remain solvent due to their massive reserves and then recover ten fold with record profits for multiple years because they will not reduce their premiums in response to less risk.
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Not how it works.... insurance companies operate at minimum profit ratios....usually single digits, if lucky. If they make too much, STATE jumps in and they have to reduce premiums....its ALL regulated by the state....if you have a problem with them.....talk to LARA and the rest of the Dems destroying this state.
 
Realbadlarry said:
Not how it works.... insurance companies operate at minimum profit ratios....usually single digits, if lucky. If they make too much, STATE jumps in and they have to reduce premiums....its ALL regulated by the state....if you have a problem with them.....talk to LARA and the rest of the Dems destroying this state.
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Isn't that just for California? Did State Farm form a spinoff company just for California business and that is what is suffering the huge loss, while the parent company is doing just fine?
 
Realbadlarry said:
Not how it works.... insurance companies operate at minimum profit ratios....usually single digits, if lucky. If they make too much, STATE jumps in and they have to reduce premiums....its ALL regulated by the state....if you have a problem with them.....talk to LARA and the rest of the Dems destroying this state
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I guess that depends on your definition of “minimum profits”.😀 4.2 billion net on 42 billion of sales plus 16 billion from asset investments. That was the last year of positive net income for State Farm. In 2023 they only earned 10 billion from their asset investments. At that level I am sure that is not considered a great year but a far cry from insolvency.
 
Sandkist said:
I guess that depends on your definition of “minimum profits”.😀 4.2 billion net on 42 billion of sales plus 16 billion from asset investments. That was the last year of positive net income for State Farm. In 2023 they only earned 10 billion from their asset investments. At that level I am sure that is not considered a great year but a far cry from insolvency.
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Exactly. And crying for immediate increases to pay for the latest disaster is bullshit too. These guys are nothing but sophisticated gamblers. They lost. Time to pay up. Nothing worse than someone that doesn't pay a losing bet
 
You guys are right, I don't know shit..... Keep hammering them..... but please don't bitch when Your ONLY option is CA STATE run insurance....I mean they do such a great job with the DMV............
 
Realbadlarry said:
You guys are right, I don't know shit..... Keep hammering them..... but please don't bitch when Your ONLY option is CA STATE run insurance....I mean they do such a great job with the DMV............
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I heard that the Ca. State insurance caps out at 5 million dollars.
 
Realbadlarry said:
You guys are right, I don't know shit..... Keep hammering them..... but please don't bitch when Your ONLY option is CA STATE run insurance....I mean they do such a great job with the DMV............
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Hammering them doesn't mean we think the state should do it. Having the government step in definitely is not the answer. These insurance companies have been gambling and winning for decades. They lost this year. Time to suck it up, pay, and move on. They don't have to have billions in profit EVERY year.
 
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